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On October 10 and 11, 2025, the cryptocurrency market had its worst single-day purge ever. U.S. President Donald Trump suddenly announced that all Chinese imports would be subject to 100% tariffs. This caused a chain reaction of fear that wiped out $19.29 billion in leveraged positions. This was the biggest liquidation event in crypto’s short but turbulent history.
Bitcoin fell more than 12% from its previous all-time high of over $125,000 to below $113,000. Ethereum and Solana fell 12–14%, trapping 1.6 million traders in margin calls and wiping out $16.8 billion in long bets alone.
This geopolitical shockwave, which was a response to China’s rare earth export curbs, not only hurt crypto but also affected stocks, oil, and Treasuries around the world, bringing back memories of the trade war in 2018. Some estimates say that this “black swan” incident might lead to a total wipeout of $30 billion in the markets. It shows how dangerous it is to have too much debt in DeFi when the economy is unstable.
However, history shows that these kinds of resets typically happen before big recoveries. The overall market cap of all cryptocurrencies has dropped 8% to $3.78 trillion. This raises the question: Is this a chance to purchase, or is it the start of more pain?
The Trigger: Trump’s Tariff Bombshell and Chaos in the Global Market
Truth from President Trump on October 10 The social media post set things off: “China is pursuing very aggressive trade actions… They will put huge restrictions on the export of almost everything they create starting on November 1, 2025. The U.S. will hike the taxes on all Chinese goods to 100% in response. This escalation, which went against Beijing’s Ministry of Commerce’s order for licenses on goods with more than 0.1% rare earth minerals (which are important for chips and EVs), canceled a planned Trump-Xi summit and reminded people of the Phase One deal’s breakdown in 2018, which caused BTC to drop by 30%.
The markets went crazy: the S&P 500 lost $1.2 trillion in one hour, Nasdaq futures fell 3.5%, and oil fell 4% amid supply concerns. Crypto, which is quite susceptible to risk-off sentiment, made the rout worse.
For example, leveraged perps on exchanges like HTX and Binance witnessed $87.53 million in single liquidations in BTC/USDT alone. By the morning of October 11, the Asia session, BTC had steadied at $113,140 (down 6% from before the news), ETH at $3,778 (-12.7%), and SOL at $140 (-14%).
Trump’s change from “open to meeting Xi” to “biffing off the tariff if reversed by Nov. 1” gave them a brief glimmer of hope, but harm was done: There wasn’t much money available over the weekend, which made the cascades worse. 70% of the liquidations were from longs betting on more bull runs. On X, @KobeissiLetter wrote, “40 minutes after Trump’s tariff post, the S&P 500 lost $1.2 TRILLION…” “Is this dip a chance to buy?” got 50,000 replies. Vincent Liu of Kronos Research labeled it a “black swan,” saying that institutional over-leverage made the situation worse.
Liquidation Carnage: $19 Billion Gone, 1.6 Million Traders Gone
The data from Coinglass shows a bad picture: In under 24 hours, $19.29 billion was liquidated, making it the biggest amount ever. This is much more than FTX’s $1.6 billion in 2022 and COVID’s $1.2 billion in 2020. Longs lost the most money, $16.8 billion, while shorts lost $2.49 billion over 1.6 million accounts. This is 20 times more than the COVID event because the market is now worth $4 trillion. Hyperliquid lost $203.36 million in ETH-USDT, which was the greatest loss. BTC ($1.37B) and ETH ($1.26B) had the most losses, while SOL and XRP lost 14% and 12%, respectively.
How do they work? Amplifies leverage: A 10% drop on 10x positions causes 100% losses through margin calls, which then cause bots to sell. The thinness of the weekend made it worse; BTC volumes shot up 145% to $183.88 billion, but liquidity disappeared. Brian Strugats of Multicoin said the amount may be $30 billion and warned that it could spread to DeFi loan platforms like Aave. @Ashcryptoreal on X: “Covid: $1.2 billion, FTX: $1.6 billion, Today: $19 billion—this is 20 times bigger.”
The Tariff Tempest of Trump
Trump’s letter, which was in response to China’s restrictions on rare earths that are important for semiconductors, canceled discussions with Xi and made Beijing’s “aggressive” steps even stronger. This 100% blanket (starting on November 1) is similar to the 25% steel tariffs from 2018, which caused crypto prices to drop by 30% because of worries about a recession. It is also similar to the 8% drop in BTC prices in April’s Phase Two tariff hike.
Rare earths, which China supplies 80% of the world with, are a danger to tech supply chains, causing chip stocks like Nvidia to drop 5%. Crypto, risk proxy, and amplified: BTC fell because Nasdaq fell 3.5%. Trump’s “open to reversal” olive offer calmed things down a little, but analysts like Ravi Doshi from FalconX say “downside protection surges” will continue.
Wider Market Effects: A Sign of a Reset or a Recession?
The market value drop of $320.5 trillion (8%) to $3.78 trillion wiped out September gains. The biggest losses were in altcoins, with BNB down 8% and XRP down 12%. Oil prices fell by 4%, but Treasuries rose. Gold prices rose by 2.5% to $2,650 per ounce, which is a classic flight to safety. Edul Patel, CEO of Mudrex, said, “October corrections come before 21% relief rallies—sentiment stays bullish.”
Liquidations work like “natural resets,” getting rid of too much leverage (OI at $187B before the crash) and shaking out weak hands. “BTC to $102K, ETH to $3.5K—tariffs + shutdown = tense Q4,” said @smt2206 on X. If tariffs stay in place, prices might drop by 20% more. If they change, prices could go up by 15%.
Conclusion
Trump’s 100% tariffs on China led to the worst day in crypto history, with $19.29 billion worth of coins being sold, BTC dropping to $113K, and 1.6 million traders being deleted. From rare earth retribution to the end of cascading longs, it’s a big mess that tests people’s strength. But because resets come before rallies (21% from October 2017 to October 2020), this slump may attract investors. Keep an eye out for signs of a truce on November 1. In the shadow of leverage, spot HODLers persevere; for the market, it’s a sobering reminder: Geopolitics bites harder than code. Is the bull cycle still going? Time—and tariffs—will tell.
